halved, from $395 U.S. to $197.50 one way for tractor-trailers. While this resolution defused

the crisis, it can hardly be encouraging for potential investors.


Comment on the Toll Roads

 Perhaps the most extraordinary aspect of the dual problems of cost recovery and

underutilization is its persistence. The highway operators appear to have clear incentives to

restructure tolls to encourage more usage by lighter vehicles and, possibly, by heavier vehicles.

For the sake of the economy and to relieve pressures on the rest of the federal system, the

Government wants highway operators to restructure tolls to encourage greater usage by all

vehicles. Moreover, it is unclear why the Government would ever wish to take back the

highways. Taking back highways is contrary to the current philosophy of privatizing and

discourages new investments. It seems probable that an accommodation will reached along the

following lines:

 1. The length for initial concessions are greatly lengthened, perhaps to 99
 years.
 2. After some shorter period, such as 30 years, the concession may be lost
 if certain performance standards are not met.
 3. Highway operators are subject to regulations regarding safety and tolls.


Deferred Maintenance Throughout The Federal System

 Limited access highways comprise only 5 percent of the 46,000 kilometer federal

highway system. However, due to the financial strain of developing limited access highways.

maintenance has been largely neglected. In part, Mexico has purchased its new roads by

depreciating its existing system. Mexico's Secretary of Communications and Transportation

estimates that 51 percent of the national road system is bad or very bad, 39 percent is average,